Consumers everywhere are being bombarded with information declaring that this is the best time ever to buy a home. Because of government cash incentives for first time home buyers, historically low interest rates, decreasing home prices and the plethora of options available, for many this is truly a once in a lifetime opportunity to achieve the American dream of homeownership. Before you take that leap of faith, you need to consider some factors do honestly decide whether you should buy a home or avoid the process altogether.
Factor: How Long Are You Staying in the Area?
If you love the area you live in and plan on staying there for five or more years and then you should buy a home. Because of the costs involved with the home purchasing process plus regular market fluctuations, purchasing a home is a long term strategy.
Not only will you build equity, but your monthly expenses will be locked for decades and after the house is paid off you will have to pay less. If you are not sure of your future plans, renting is best.
Factor: What’s the Cost?
After crunching the numbers (including HOA dues, insurance and taxes) would your monthly home owner payments be about equal to your current rent and can you afford it?
If you answered yes, then you should buy a home as in the long run, when you sell you will recover your expenses. If however, you have an incredibly deal on a rent stabilized apartment, are 100% thrilled with your living situation and know that it will cost you substantially more on a monthly basis, staying in your apartment and investing the difference between the two options may prove to be a better strategy in the long run.
Factor: Are You Ready?
Do you want to buy a home because it has always been a dream and you want to put a roof over your head for your family and live in the area for a long time, great, buy a home. However, if you think buying a home is a great investment opportunity that guarantees appreciation in value, by reviewing the current housing market situation you will be reminded that it is not a sure thing and you should not purchase a property.
Of course when it comes time to deciding whether or not to buy a home, you need to honestly evaluate your financial situation as well as your credit history to ensure it is possibly. Couple those core numbers with your motivation and commitment to your becoming a home owner and the decision of “should I or shouldn’t I” will come more easily.